Technical view on Bharti Airtel
From the high of Rs 612, which was registered on May 20, 2020, the stock of Bharti Airtel Limited has marked the sequence of lower tops and lower bottoms. During this period, it slipped below its major support, one after the other, in the form of 61.8 per cent retracement level and 200-day SMA.
The stock has underperformed the frontline indices in the current leg of the upward rally. Also, the stock has relatively underperformed Nifty 500 with a decent margin. The relative strength comparison with Nifty 500 and Nifty 50 has slipped below the low of November 2019.
Talking about the moving averages, in the current week, the stock has slipped below its 200-weekly simple moving average (200-WSMA) for the first time since October 2019. In technical parlance, the 200-day/week simple moving average (SMA) is considered a key indicator for trades and market analysts to determine the overall long-term trend of the stock or index.
Further, around twelve trading sessions ago, the 200-day MA had crossed the 50-day MA and was termed as the ‘death crossover’, which is a long-term bearish signal. These two trade set-ups are giving a clear indication that the stock is in a medium to long-term downtrend.
Among the momentum indicators, the stock's Relative Strength Index (RSI) is in a super bearish zone in both the weekly and the daily timeframe. The lagging indicator, MACD stays bearish as it is trading below its zero line and signal line. The histogram is suggesting a pickup in the downward momentum. Moreover, the directional index i.e. the bearish strength is higher than the bullish strength as +DI is much below the -DI.
Hence, technically, all the factors are currently aligned in support of the bears. On the downside, major support for the stock is placed in the zone of Rs 360-Rs 350.